Government mulls new income-support Covid-19 measure of up to €4bn

The Government looks set to unveil an unprecedented income-support scheme in the coming days in which it will pay 75% or 80% of the wages of the thousands of workers who have lost and will lose their jobs amid the Covid-19 crisis.

Government mulls new income-support Covid-19 measure of up to €4bn

The Government looks set to unveil an unprecedented income-support scheme in the coming days in which it will pay 75% or 80% of the wages of the thousands of workers who have lost and will lose their jobs amid the Covid-19 crisis.

Government officials are looking at schemes in Denmark and Portugal and are weighing proposals from employers and trade unions for a new package of measures.

It comes as British prime minister Boris Johnson did a surprise u-turn on its laissez-faire response to the crisis by announcing on Friday night it would guarantee 80% of the wages of UK workers at £30,000 (€32,620). Employers will pay the remainder of the wages.

Patricia King, secretary general of the Irish Congress of Trade Unions, Ictu, and Fergal O’Brien, director of policy and public affairs at employers’ group Ibec, told the Irish Examiner they submitted to Government officials separate proposals for an income-support plan late last week.

Ictu said that the cost to the exchequer of its proposal would amount to €1.7bn through to the end of June for incomes up to €40,000, while Ibec said its proposal will cost €4bn because it’s over a longer period and estimates that 500,000 people could, under a worst-case outcome, lose their jobs over the coming months.

But Mr O’Brien said Ibec’s costing also includes the existing bill for the emergency sick pay measures the Government has announced, as thousands of pub, retail and hospitality workers lost their jobs in the lockdown of a week ago.

“Ireland is a rich country and we can afford to do this,” Mr O’Brien said.

Ms King at Ictu said: “If we all do what we are supposed to do and curtail the spread of this and it works, and come July 1, we start to reset the economy.”

“The objective is that when the shutters come up, the workers come back to work, and people have money in their pocket and start spending again,” she said.

A Department of Finance spokesman said the Government is considering options to reduce further job losses and provide support to those who have lost their jobs.

“We have already taken a number of measures including a €3bn package and we will also study provisions made in other jurisdictions,” the spokesman said.

Trade union Mandate secretary general John Douglas praised SuperValu, Tesco, and Dunnes for plans to roll out perspex screens to protect their frontline staff and for imposing other protection measures but said elsewhere in the retail industry “it has been hit and miss”.

He said that tens of thousands of its members have been laid off but some well-known retailers have “behaved disgracefully” by laying off staff with little notice or cut hours to unsustainable levels.

Mandate represents 35,000 retail staff and about half of those workers have been laid off, he said.

Meanwhile, the US was inching closer last night to agreeing a huge bailout programme for its economy.

US senators met yesterday in a bid to finalise a bipartisan bill worth more than $1tn (€932bn) to help soften the economic blow from the coronavirus pandemic.

Senate Democratic leader Chuck Schumer and House speaker Nancy Pelosi say they want to add more worker-focused provisions to the draft legislation released late last week by Senate majority leader Mitch McConnell.

Treasury secretary Steven Mnuchin has been representing the Trump administration in the talks.

Republican leaders said they were hopeful they can resolve outstanding issues on the virus-relief package, as they have some agreement on total spending levels for certain provisions.

Republicans agreed to the Democratic request to bolster unemployment insurance.

Lawmakers are still discussing how to characterise the loans to small businesses that would be forgiven if companies retain most of their workforce, essentially turning them into grants.

“I’m confident we’ll get to yes,” Mr McConnell said.

Additional reporting from Bloomberg

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